When one person knows more than another, it creates a situation:
A. called information asymmetry.
B. called information dominance.
C. in which the transaction will not occur.
D. in which the transaction is always regretted.
Answer: A
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The three major components of a bond are the bond price, maturity date, and coupon rate.
Answer the following statement true (T) or false (F)
Initially, the economy is at point B on Figure 10-1 above. According to the Solow growth model, an increase in the output per capita without an increase in capital per worker is represented by ________ and could be the result of ________
A) the movement B to E; new technology discoveries B) the movement B to H; improved health and education per worker C) the movement B to C; an increase in the savings rate D) the movement B to F; a decrease in the savings rate
An example of a negative externality is: a. the benefit you receive when your neighbor installs a smoke detector
b. the reduction in profits for your company that occurs when there is a decrease in consumer demand for the product you manufacture. c. the sleep you lose when your neighbor throws a loud party next door that keeps you awake. d. the change in the property values of your neighbors' homes when you paint your house and landscape your front yard
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C